Credit cards can either be a boon or a pain depending on how you look at things. Credit cards are useful during times of emergency and one can get out of a tricky monetary situation using a credit card if cash is unavailable. Credit card are ideal for paying of large bills and these are easier to keep track off as well. However, most people make the mistake of thinking that a credit card is an unlimited source of money. One must always keep the fact that a credit card is nothing more than a loan in mind.

The interest rates for a credit card are quite high and they can cripple a person over a period of time. If the dues aren't paid in a prompt manner, there is a good chance that the credit card provider will increase the penalty amount as well. Since most people tend to spend much more than they earn, credit cards become quite a bane in the long run. Here are some tips which one can follow to use a credit card effectively. One can apply for a credit card easily through the internet these days.

Make Only Large Purchases: Credit cards should only be used to make large purchases. For example: while purchasing expensive durable items such as washing machines, televisions and refrigerators, it might not be feasible to carry cash around. In such a case credit cards can be used. And if the dues are paid as soon as the monthly statement arrives, the provider will not charge any penalties. Avoid making every day purchases such as groceries and such. Over a period of time, the bills will rack up and become unmanageable.

Do Not Shop For Clothes: Shopping is one of the main reasons for high credit card debt all around the world. In fact this is not restricted to just women and many men are using their credit cards to make purchases which are over and above their ability. One must ensure that they avoid using the credit card for anything other than an emergency.

Do Not Withdraw Money: Many people are unaware of the fact that withdrawing money using a credit card is fraught with risks. One has to pay a spot interest which is quite high for availing this service. Credit cards are not the same as debit cards and you must not withdraw money from an ATM at any cost. It is always better to use the card at a shop or a store rather than withdraw cash.

One must also remember that banks and other financial institutions which offer credit cards are always waiting for a good opportunity to penalize defaulting customers. Their ultimate aim is to make money of their customers. Credit cards may look like a boon but there are nothing more than a lifelong bane. If they are not managed properly one can get into quite a bit of strife. These days most people are aware of the risks which are attached to using a credit card frequently and credit card applications have dropped significantly.